Exploring rural resident’s Digital Capital against external shocks in digital transformation

Digital Capital and its economic implications have gained significant attention in digital transformation era. In rural areas, external shocks can easily lead to widespread income fluctuation, making the enhancement of income resilience a central long-term task for rural development. This study addresses the critical issue of improving rural resident’s income resilience against external shocks in digital transformation by exploring the mechanism and effect of Digital Capital on rural resident’s income-increasing rate through the mediation effect of individual dynamic capabilities by the method of structural equation model (SEM). The Digital Capital and individual dynamic capabilities of rural residents were developed through a confirmatory factor analysis (CFA) and validated with a representative sample survey of 289 rural residents in Yantai City, China. The theoretical and empirical contributions to the literature lie in that: (1) clarifying the quantitative relationships among Digital Capital, rural resident’s income-increasing rate (concrete benefits in the offline arena) and individual dynamic capabilities. (2) exploring the mechanism by which Digital Capital operates on the specific outcomes. The findings indicate that rural resident's Digital Capital has a direct impact on their individual dynamic capabilities, and can influence rural resident's income-increasing rate from the perspective of total effect; Furthermore, the analysis demonstrates individual dynamic capabilities fully mediate the relationship between Digital Capital and the income-increasing rate of rural residents.